The Importance of Time Tracking for Payroll and Compliance

In a quiz about time management by Forbes magazine, a full 69% of the 7000+ respondents said that they weren’t tracking their time. 50% of those who took the quiz also admitted that a full quarter of their time at work was wasted. That’s a pretty good sample size, and the statistics are perhaps unsurprising, but there are many repercussions to not tracking your time effectively. When payroll and compliance come into play, time tracking becomes an essential tool for your business.

If your employees aren’t sure where their time is going, or how much time certain projects take, how can there be an opportunity for you to fine-tune any inaccuracies or potential time theft if you don’t even know it’s happening? A Harvard Business Review report found that the US economy could be losing $7.4 billion per day from untracked work hours. Here are some compelling reasons for the importance of time tracking for payroll and compliance.

Reliable data. Payroll management needs to be effective, and data is the most important factor. Accuracy, therefore, is paramount. If employees aren’t tracking their time and project times aren’t being specified, how can you know if you are paying or being paid fairly? And what about time loss? You can never be sure if you can cut costs or if there are issues which need to be dealt with to help your cash flow if your records are flawed. When tax time comes around, having a precise paper trail is crucial to ensuring your payroll is exact when it comes to employee hours and project times.

Identifying problems. Identifying any issues is quick and easy when you are time tracking. It will be easy to pinpoint any inaccuracies or areas which are inefficient when you can look over the data compiled from careful tracking. The more you can understand your company workflow, the better you can cut costs, manage the productivity of your employees, and optimize future project management by setting goals which fall into achievable parameters based on your personal data.

Better estimations.Future projects are enhanced when you know exactly how much time different tasks take, and how long certain employees need to get these jobs done to the highest standard. With accurate tracking, you will be able to correctly estimate how much a project will cost, which employee will be most effective, and feel secure in the knowledge that you are charging your client a fair rate which reflects the time worked. If you know that time is being lost because it is obvious from your time tracking data, you can save money by revamping the time spent on each part of the service.

Ease for employees. Tracking time doesn’t have to be a nuisance. It can be easy and fast for your employees, especially when they understand that precise data means that their hours and overtime are accurately reflected on their paychecks! If you outsource your tracking to an accounting software like Time Tracker, your employees will be able to track from any device, at any time, from any place! This will give each individual a greater sense of ownership when they can see how many vacation days they have left and how their hours match with their pay. When their time is measured against the team’s time, they can start to identify areas in which they can improve productivity, which is a great impetus to better output.

Transparency for your clients. Your invoices need to be clear and exact. By effectively tracking your time, your clients will know just what they’re paying for. This is particularly important if you work as a freelancer, as you need to prove just how valuable your time is, and how long you’ve spent building your product. If your invoices show total precision in hours worked, you will build trust with your customers, and they will see the value of your work laid out before them.

Time Tracker can help you to get a better handle on your payroll and compliance. Track your time from your mobile device or desktop, any time, any where. Process your payroll, create invoices, and sync with your accounting software. Try our 30- day Time Tracker trial today, and see for yourself how much time and money you’ll save! No hassle, and no credit card required.